This website is for Private Investors* only

*A Private Investor is a recipient of the information who meets all of the conditions set out below, the recipient:

Obtains access to the information in a personal capacity;

Is not required to be regulated or supervised by a body concerned with the regulation or supervision of investment or financial services;

Is not currently registered or qualified as a professional securities trader or investment adviser with any national or state exchange, regulatory authority, professional association or recognised professional body;

Does not currently act in any capacity as an investment adviser, whether or not they have at some time been qualified to do so;

Uses the information solely in relation to the management of their personal funds and not as a trader to the public or for the investment of corporate funds;

Does not distribute, republish or otherwise provide any information or derived works to any third party in any manner or use or process information or derived works for any commercial purposes.

Economy

Market Report

Companies

Currencies

UK inflation data on Tuesday is especially important as markets look for data to strengthen or weaken the Bank of England's conviction to increase interest rates as early as May, with US inflation the following also under the microscope.

Inflation expectations Stateside have been rising but the consumer index price data on Wednesday are expect to show core CPI data for January remains subdued when prices for fuel and food are excluded.

This "might at least temporarily alleviate concerns about a monetary tightening in the US" said Allianz Global Investors global strategist Stefan Scheurer.

RBC Capital Markets was looking for UK CPI inflation to have risen slightly back to 3.1% in January from 3.0% in December, which will require BoE governor to get his typewriter out again.

"In our assessment, though, it is fairly finely balanced, so we would not be too surprised to see inflation remain at 3.0% y/y and that would be in line with the Bank of England’s latest short-term forecast contained in the February Inflation Report.

"With the oil price having risen significantly in recent months, it now seems more likely that CPI inflation will be relatively slow to fall in 2018 even though the impact of previous exchange rate depreciation starts to fade."

A second reading on European GDP on Wednesday is not expected to see any revision to the initial 0.6% rate of quarter-on-quarter growth, though Germany and Italy are also reporting their individual growth this week.

The company calendar is not too busy in the UK, with a quiet Monday that has no big names scheduled but numbers from smallcap stock Pendragon; then Tuesday we are due to get prelims from Acacia Mining, quarterly results from Tuiand interims from Animalcare and Hargreaves Services; on Wednesday there should be interims from Galliford Try plus finals from Coca-Cola Hellenic and Shire; on Thursday the agenda has interims from ConvaTec alongside full-year results from Indivior, Lancashire and Relx; with Friday's only FTSE 350 results expected to be Segro's prelims.

Turning to next week for commodity markets, Capital Economics said the lead could continue to be taken from developments in broader financial markets. "We are not expecting a significant rebound in US equities in the coming weeks, but nor do we expect the rout to continue. Away from the markets, President Trump is set to unveil the details of his $1.5trn infrastructure plan on Monday and China’s Lunar new year holiday will start on Friday."

Summing up the market and macro themes in their preview of the week ahead, economists Dankse Bank said they viewed the sell-off in stocks as "a correction - the upward trend is supported by strong profit growth", with data this week adding to the picture of a robust global recovery underpinning profits, though they see bond yields as likely to increase further in February.